Just as it did many years ago with the rollout of its groundbreaking Office productivity suite, Microsoft is once again bent on transforming the way organizations do business. This time around, its agent of change is the cloud-operated Office 365.

The next generation of Microsoft's Business Productivity Online Standard Suite (BPOS), Office 365 represents the company's full-out commitment to the cloud computing model, in which software is delivered as a service. Office 365, now in beta, sees Microsoft melding the online versions of its communications and collaboration products with the latest iteration of its desktop productivity suite in a single, integrated, always-up-to-date service.

When Office 365 becomes generally available later this year, it will comprise Exchange Online for e-mail; SharePoint Online for collaboration; Lync Online for unified communications; and the latest version of the Microsoft Office Professional Plus desktop suite. Following that will be a version that includes Microsoft Dynamics CRM Online, according to Microsoft.

While details on the service's full features and functionality remain unclear, industry watchers say they like what they've seen so far.

"Conceptually, Office 365 is a great idea. From a functional perspective, integrating the online Office suite with hosted Exchange, SharePoint and Lync servers is going to be very useful," says Michael Osterman, president of Osterman Research.

In particular, Osterman notes the benefits of being able to deliver a consistent desktop experience for users regardless of where they are or what device they're using.

"Mobility, meaning allowing users to work from wherever, is a real trend. One of Office 365's strengths will be its ability to enable the same communications, collaboration and application experience from home as in the office," he says.

Organizations that already have SharePoint or are interested in moving it into the cloud are in for a big step forward with Office 365, says Kathleen Reidy, senior analyst with The 451 Group. That's because the BPOS collaboration service is based on SharePoint 2007, while Office 365 will bring SharePoint 2010 to the cloud.

"SharePoint in Office 365 should be fairly full-featured," Reidy says. "There'll be collaboration, content management, portal and search capabilities, for example, so a small organization will be able to set up an intranet, publish content and allow file sharing and collaboration around this shared repository."

Microsoft touts the value that Office 365 can bring to small and large organizations alike, in all categories. Office 365 for education, for example, could allow a local school district to get enterprise-scale software and services for the first time, while a state government could use Office 365 for enterprise to cut costs and keep up with the latest developments with minimal time or effort.

Pricing for Office 365 will vary depending on number of users and applications selected. For example, organizations with fewer than 25 workers will pay $6 per user, per month, for the Office 365 suite for small business. Larger, enterprise-scale organizations can expect to pay a monthly fee of $24 per user for the entire suite.

4 Number of services initially included in Office 365 (Microsoft Exchange, SharePoint, Lync and Office Professional Plus)

15 Number of minutes it should take a small organization to get up and running with Office 365

Reidy gives a nod to Microsoft's aggressive pricing for Office 365, citing the accessibility that Microsoft provides in the lower-end packages. "Particularly for smaller organizations that typically wouldn't have the resources to buy, install, run and maintain SharePoint, this is a very cost-effective option that will give them quite a bit of functionality from a basic file-sharing, content management point of view," she says.

Brett Hill, CEO at HillTech Services and host of Office365answers.com, is also excited by the pricing. "There will be an amazing set of features and capabilities built into the service for the price-point," he says.

"Office 365 is going to make the features that enterprises have been enjoying for a long time available to organizations that haven't had the infrastructure, time, money or personnel to deploy on-premises," Hill adds. "And this includes security, backup, support and high availability."